2009 (3) TMI 60 - HC - Income Tax

Penalty u/s 271(1)(c) - factum of concealment stands established on the facts and circumstance and the evidence on record - fact that assessee not having challenged any of the assessment orders for the 3 years is indicative of acceptance that there was concealment of income - conduct of the assessee does not indicate that revised returns were filed voluntarily and in good faith - Tribunal finding that revised returns were not voluntary and thereafter upholding the penalties is finding of fact

Summary

Issues Involved:
1. Justification of penalty under Section 271(1)(c) of the Income Tax Act, 1961.
2. Confirmation of penalty despite the assessing officer's finding of no specific evidence.
3. Tribunal's finding on the liability of penalty on disclosed income being contrary to evidence.

Issue-wise Detailed Analysis:

1. Justification of Penalty Under Section 271(1)(c):
The Tribunal upheld the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, for the Assessment Years 1985-86, 1986-87, and 1987-88. The assessee, a Private Limited Company, had filed revised returns disclosing additional income after a survey by the Deputy Director of Income-tax (Investigation). The revised returns were not considered voluntary as they were filed after the investigation had progressed, indicating concealment of income. The Tribunal reduced the penalty to the minimum but confirmed its imposition, stating the revised returns were not filed in good faith or voluntarily. The Tribunal's decision was based on the overall conduct of the assessee, which did not indicate inadvertent omission but intentional concealment.

2. Confirmation of Penalty Despite Assessing Officer's Finding:
The assessee argued that the assessing officer's finding of "nothing specific" against them should negate the penalty. However, the Tribunal noted that this statement could not be read in isolation. The findings from the assessment year 1985-86 were incorporated into the subsequent years, and the declaration of Rs.18 lacs each for the years 1986-87 and 1987-88 was not withdrawn. The Tribunal found that the revised returns were not voluntary and were made after the investigation had revealed discrepancies. The Tribunal concluded that the penalty was justified as the revised returns were not filed in good faith.

3. Tribunal's Finding on Liability of Penalty Contrary to Evidence:
The assessee contended that the Tribunal had not considered their alternative plea regarding the penalty calculation for the Assessment Year 1985-86. The Tribunal had rejected the Miscellaneous Application for rectification without addressing the alternative contention. The court noted that the reference applications only challenged the order dated 31.3.1997, and not the subsequent order dated 19.9.1997. The Tribunal's decision was based on the evidence and the conduct of the assessee, which indicated concealment of income. The court found no legal infirmity or lack of evidence in the Tribunal's findings.

Conclusion:
The High Court answered all three questions in the affirmative, in favor of the revenue and against the assessee, confirming the penalties imposed for the three assessment years. The revised returns were not considered voluntary, and the Tribunal's findings were supported by evidence, indicating intentional concealment of income by the assessee. The reference was disposed of with no order as to costs.